Texas Permanent School Fund, Austin, produced a 9.44% return for the fiscal year ended Aug. 31.
The $25.5 billion endowment fund outperformed its customized policy benchmark by 57 basis points.
Performance attribution analysis showed that every asset class in which the fund invests contributed to the overall fund’s performance, said Carlos Veintemillas, deputy chief investment officer, in an interview.
“The board has been very conservative in its investments so we came out of the global financial crisis in better shape than many other endowments. Many other endowments had a lot more illiquid investments than we did and had to tap other more liquid asset classes to meet operating expenses. Our 2012 fiscal-year return is not affected by the same timing issues,” Mr. Veintemillas said.
Texas Permanent distributed a total of $1.2 billion to support Texas public schools in the two years ended Aug. 31.
Texas Permanent School Fund is the second-largest U.S. educational endowment behind Harvard University’s $30.7 billion endowment. Harvard suffered a marginal investment loss of 0.05% in its fiscal year ended June 30.